Complete sodding toss from Ritchie

Since most economists view the world from a right wing, neoliberal perspective they really have nothing very useful to say on tax because their model of the economy sees no useful purpose for it. As far as they consider the issue tax is invariably an imperfection preventing the optimal outcomes that they assume markets will provide and which their models of the economy are built to prove. They do this by the use of assumptions for which there are no rational bases (like people being rational). Alternatively they ignore facts, like tax having a fundamental and seemingly useful role in every economy of note by funding the services that people very clearly demand that a government, and not the market, supplies. But because most economists assume that this is not possible they should, by default, be ignored in debate on tax on the basis they have nothing useful to say on an issue they have never meaningfully studied.

No one, no one at all, other than an anarcho-capitalist, assumes that all markets, nothing but markets, all the time markets, provides an optimal outcome. That’s why the economics profession is united behind the ideas of either cap and trade or a carbon tax to deal with climate change (if it exists). Because all agree that pure markets do not provide optimal outcomes all the time and everywhere.

Idiot.

As to rationality. So, people are not rational then. But they demand government services. They must therefore be irrational in doing so, mustn’t they?

Or, if they’re being rational in demanding from government certain things that the market doesn’t provide (in which they are being rational, the debate is only over which things markets and governments can and can not provide) then humans are indeed rational, aren’t they?

And absolutely no economist insists that government cannot usefully provide certain things, nor that tax revenue is required to pay for such (even the MMT loons insist that taxation is necessary to limit the inflation from funding government by creating new base money).

Ritchie doesn’t understand what economists do say but feels entirely comfortable in rejecting it all because….well, because what?

And then there is the problem created by politicians. Let’s start with the obvious problem that since Neil Kinnock lost the general election in 1992 no politician has believed it possible to increase tax

I think you’ll find that Gordon Brown did increase tax you know.He raised the personal allowance only by inflation, when wages were rising faster than inflation (and in at least one year didn’t even do that). That’s a rise in tax through fiscal drag and it’s how we ended up with people working part time on minimum wage paying income tax.

Then there’s the problem of most politician’s incomprehension of what tax is, and what it is for. This is a pretty big theme in my forthcoming book, The Joy of Tax, but the essence of the problem (even if we ignore for now the intimate relationship between tax and money) is it seems that all politicians think that the sole purpose for tax is paying for public spending. This is completely illogical: first tax is also used to reprice goods and services and secondly to redistribute income and wealth.

Err, yes, like all those economists talking about how to reprice goods through a Pigou Tax to deal with externalities.

Fucking moron.

Until 2009 that might just have been a theory but now we know it is true: £375 billion of quantitative easing has, since then proved that the government can spend without taxation and effectively cancel the debt it has created to do so without any effective economic consequence if there are otherwise under utilised resources in the economy, as has been the case since then. This should not have been a surprise to anyone: after all, it is now a fact acknowledged by the Bank of England that banks can also create and cancel money out of thin air to meet the demand of the private sector and have no impact on key economic objectives such as inflation if there are existing under-utilised resources in the economy. Why it should be different for a central bank is hard to imagine, except that as the overall best influencer of the price of money it has the greatest chance to do so with least likely damaging consequence arising.

So Milton Friedman was correct about monetarism then. As he showed in his Monetary History of the United States (with Anna Schwartz) and Ben Bernanke, an historian of the Fed’s actions in the 1930s, was an economist who knew what to do when the Crash came.

But economists should be ignored in favour of Ritchie because economists don’t have anything useful to say.

Whadda cretin.

I do appreciate discussion on tax. But in 2015 my wish is that it be informed debate. Without adequate theories of taxation most economists cannot offer that because they view it only as a funding mechanism whilst current politicians have forgotten the intellectual achievement of the post war generation of leaders who perceived it if, sometimes only glimly, as something so much more than that.

If you are determinedly ignorant of what economists say about taxation then how in buggery can you form a view of what economists say about taxation?

What we need are those able to ignite this debate again. Then we could have real political discussion in this country because it is tax that liberates economic possibility. The poverty of current debate is that it thinks the exact opposite to be true.

Hey, why not? Let’s have a proper debate on tax! Informed, perhaps, by what thousands of very clever people have worked out over the past couple of centuries rather than worshipping at the shrine of the dribbling incontinent that is the Retired Accountant from Wandsworth?

I’m all for it personally.

47 thoughts on “Complete sodding toss from Ritchie”

  1. “since Neil Kinnock lost the general election in 1992 no politician has believed it possible to increase tax.”

    For the last 50 years the UK has raised typically 35-36% of GDP in taxation. Considering the fact that this period encompasses the supposedly high tax 1970s and the lower taxed 1980s it does seem as if whatever tweaks Chancellors make to tax rates the overall impact doesn’t change much. The lowest tax burden was in the early 70s (32.6%) and the highest under Thatcher in the early 80s (37.6%).

    The response to Ritchie should be that whatever higher tax rates or wealth taxes he is thinking of introducing won’t actually increase government tax revenues. The loss of economic activity will offset the rate rises.

    Tax revenues as percentage of GDP:

    http://www.theguardian.com/news/datablog/2010/apr/25/tax-receipts-1963

  2. Tim

    ‘Ritchie doesn’t understand what economists do say but feels entirely comfortable in rejecting it all because….well, because what?’

    You know this but it bears repeating: what he says and what he knows or understands are two different things.

    I’m quite willing to accept that he doesn’t understand much beyond first year economics, but I do not accept that he believes that all or even most actual economists are against tax as a concept.

    He knows this is not true.

    Like most of his ilk, he is incredibly selfish – he has worked out that there is a living to be made in arousing the anger of the less intelligent against a series of straw men.

    He does this, as all western leftists do it, in the knowledge that the very system they are attacking is providing the greatest material benefit to the greatest number of people in the history of the world, and on the further – and I hope not mistaken – assumption that the system will step in if ever the rhetoric gets taken too seriously by too many, and people start raping and burning in the streets of – oh I dunno – Downham Market, Tuscany, Islington etc

    He is therefore a greedy lying cunt, not a cretin (though he may be both).

  3. @ Interested I think you make an excellent point.
    It is one of the strangest phenomenon of history that classic liberalism freed the masses from poverty only to be attacked by a new elite which has largely succeeded in persuading the same masses to abandon their liberator.

  4. Bloke in North Dorset

    This is why Kinnock lost that election:

    http://www.youtube.com/watch?v=7TOgB3Smvro

    especially the bit from 1:35 (To save you the pain of watching its the “alright” speech, but the whole show was a turn off). It was sod all to do with taxes. We got a very close look at how arrogant Kinnock really was and how presumptious Labour had become and the middle of the road voter was turned right off.

    That whole piece from Ritchie can be boiled down to “economists say things I don’t like, therefore they shouldn’t be allowed in to the debate”.

  5. “and it’s how we ended up with people working part time on minimum wage paying income tax”

    Technically, the introduction of the minimum wage in 1999 achieved that by itself. The starting level was £3.60/hr; at the time the lower threshold for income tax (“personal allowance” in the taxman’s jargon) was £4,335. Anyone working more than 27 hours a week on minimum wage would already be paying tax.

    Since it’s a quiet day at the office, I’ve run through the figures for the last 15 years. In 1998 it took 27.4 hours a week, 44 weeks a year, of minimum wage work to reach the personal allowance. This number fell to a low point of just 21.4 hours a week in 2006, then it started rising again to reach 35 hours today. Although we’re not French, I suspect 35 hours will be the stopping point – they want the money after all.

  6. @Bloke in North Dorset

    Wow. The delusion. To claim with a grin that the government up to 1992 had INCREASED poverty (implicitly with respect to 1979). To claim that Labour was the party for everyone instead of classes and interest groups.

    Wow.

    No wonder the damp hankerchief with the blue rosette won.

  7. Then there’s the problem of most politician’s incomprehension of what tax is, and what it is for. This is a pretty big theme in my forthcoming book, The Joy of Tax, but the essence of the problem (even if we ignore for now the intimate relationship between tax and money) is it seems that all politicians think that the sole purpose for tax is paying for public spending.

    This is utter sodding nonsense. Politicians all know the power of the tax code as a way of shaping people’s lives by trying to get them to do the politicians’ preferred economic activity. Indeed, politicians and people like Richie derive a lot of joy from trying to control people’s lives.

    And you can pretty much stop reading any time you see the word “neoliberal”. It’s a word devoid of meaning other than signalling that you dislike the other person’s views, and will just dismiss them without dealing with them. It’s the replacement for “Fascist”.

  8. He’s been hallucinating a few more straw men over the holidays, I see.

    He welcomes ‘informed debate’ on tax. Not on his website, he doesn’t. He welcomes fellatio of his absurd Leftist edifice but no more.

  9. first tax is also used to reprice goods and services and secondly to redistribute income and wealth.

    and in distant third raising money for stuff govt has to do.

    Except that your high taxpayer, wondering HTF he has to pay £110K for a decent butler, regards point 3 as far more important than the other two. If he thought tax was only for 1 &2 he’d refuse to pay any, and Richie would be fucked.

  10. He certainly has a unique appreciation of tax, economics and history.

    So either he’s barking, or everyone else is. What would Occam say?

  11. Interestingly, no comments have made it past moderation so far on this piece, though later pieces have plenty. I have left a comment to this effect, which of course he will have to delete 🙂

  12. I am going to shock people:

    I think I am going to buy ‘The Joy of Tax’; really I am! Because I think his ideas about money will be a hoot.
    The first big idea underpinning (for ‘underpinning’ think beachfront clapboard houses on the Gulf of Mexico) MMT is that money derives it’s value from being used to pay tax. Everything flows from there. Now I would have thought you couldn’t get a more idiotic statement on economics than that. Yet I know, KNOW I tell you, that our Ritchie will prove me wrong
    I can’t wait.

  13. Well, one way for fiat currency to be given value is if the State insists that debts to it (i.e. tax) have to be paid in it. Thus it has value at least for those transactions.

    So it’s not 100% wrong.

    However, there’s plenty of other ways money can have value – Bitcoin for instance would be an obvious example of a pseudocurrency not issued by a State, and not valid for payments to a state. However, it would be a typical Richiebollox argument to take one particular way money can have value and treat it as the *only* way…

  14. Ironman:I think I am going to buy ‘The Joy of Tax’; really I am!

    If the title draws from ‘The Joy of Sex’, I hope there are plenty of illustrations of people pleasuring one another with tax and not simply a photo of the fat-necked fiscal dildo on the dust-jacket.

    Let us know. Please.

  15. bloke (not) in spain

    Ironman
    I am going to shock people:
    I think I am going to buy ‘The Joy of Tax’; really I am!

    In the true spirit of the author you really should steal one. Or at least steal the purchase price by mugging an OAP.

  16. abacab

    Tour’s right, he’s only 90% wrong. And there is indeed Bit coin …and the Yankee dollar accepted by cab drivers all over Latin America and Zimbabwe having no currency anymore and…

  17. @Interested: “he has worked out that there is a living to be made in arousing the anger of the less intelligent against a series of straw men.” Perfect summation for most lefties.

    @ [email protected]; “It is one of the strangest phenomenon of……..new elite which has largely succeeded in persuading the same masses to abandon their liberator.”

    As above, most too ignorant to realize and then we have nasty scum like @RichardJMurphy that manipulate their sense of right and wrong.

    Being banned on his site, and blocked on twitter, what other avenues are there to engage him in debate?

  18. Urban Dictionary has three definitions for glimly, all of which are worth a chuckle in this context:

    1: One who pretends to be offended by words they use constantly and uses the attention they gain to get their way.

    2: A hypocritical person.

    3: A person of little to no value who claims superiority over all else in an attempt to gain respect and social acceptance.

  19. And now we get (on taxation):

    ‘Just as you are wrong about people handing over their own money to the state. They are handing over what belongs to the state’

    So there we have it – all things belong to the state.

  20. He is a very successful rectiloquist. The reason you can’t see his lips moving is because he is talking through his arse.

  21. Tim

    I’m thinking maybe he writes some of his stuff in an effort to kill you by stroke or heart attack. Avoid the stress for against stupidity the gods themselves contend in vain. Anyway, I do not think he’s stupid, I think he’s a great and clever con man.

    I am glad to see that some other commenters are starting to see the light about Ritchie, but I am saddened by the hate. As the immortal Canada Bill Jones said, “It is immoral to let a sucker keep his money” and Ritchie is behaving with great morality towards his clients.

    Surely you enjoyed the movie “The Sting”? A good con is always fun to watch. Why rail away, for every penny Ritchie gets from his clients is less money the clients can spend even more stupidly.

  22. ‘Just as you are wrong about people handing over their own money to the state. They are handing over what belongs to the state’

    Oh, please can he go on Newsnight and be asked to explain this statement in the context of his role as a shill for Labour.

    This man is a goldmine for anti-labour posters, and the Tories should be playing close attention.

    Anyway, he’s at least being morally consistent here – he considers that if the State deems something to belong to it, then it does and so you should hand it over. It came up as well on his last passport taxation thread, in response to my prodding him about taking money out of poor economies to pay it to a rich one, namely the uk: “it’s not taking money out of other countries’ economies, it’s paying it to where it’s owed”.

  23. Matthew L

    It is not a Murphy Richards post – I think he was talking about baNdying around ‘The joy of tax’ Around 2011 (possibly in a ‘debate’ with France’s Coppola on Twitter) he does not do irony or humour of any kind as anyone on this blog will tell you….

    Abacab

    Could be tricky to use him as an anti- Labour poster child because of his declared support for the Greens (also his various faux pas have nixed the prospect of him in the Alan Walters role under Miliband) – no sure he and Ed Balls could co-exists comfortably, either…..

  24. @Van_Patten

    That’s excellent to hear. Let’s hope that the unions do not foist him as a labour advisor in the (hopefully) unlikely event of a Labour victory. The damage he could do, both to the country and to the diaspora, could be quite substantial.

    I sincerely hope that his blogging has rendered him damaged goods to the extent that he couldn’t possibly ever be used as an advisor.

  25. Anyone know who Ritchie’s publishers are? I will suggest to them that the Joy of Tax can be publicised through him presenting a cheque to the leader of Norfolk council for the business rates he hasn’t been paying on his home office and a cheque to the Treasury for all the NIC he avoided through his use of limited companies. Let Ritchie experience the joy of tax!

  26. From Ritchie in August:

    “Transworld – a part of Random House – are my publisher. Random House published Over Here and Under Taxed”

  27. Abacab

    UNITE Have suggested him as an advisor as part of their ‘price’ for offering support for a while but the incident with Poppy Dinsey, where Ritchie made comments that could easily be construed as ‘sexist’ by various touchy feminist types on Twitter put the skids under him. Various other blog posts (not least the Jolyon Maugham one) have rendered his prospects even more dire.

    It’s a shame actually, in some ways. He is so profoundly ignorant of economics, history, science, international affairs, human nature (insert whatever other topic you wish) that as a propaganda tool for UKIP and the Tories he would be very hard to beat.

  28. VP

    I’m not sure you’re right about your Jolyon Maugham comment. There’s a lot of common ground there. Semantics an’ tha’.

    I think it’s quite sad the amount of personal vitriol about someone who really obviously cares about what he does. OK, so you have a different opinion, but that’s all it is. Unless you are all trying to tell me you know everything about everything?

  29. “I’m not sure you’re right about your Jolyon Maugham comment. There’s a lot of common ground there. Semantics an’ tha’.”

    Nothing to do with common ground – it was his vicious and hypocritical behaviour on the comments thread that was atrocious, and it was well-exposed since he couldn’t hide it behind the ban stick.

    “I think it’s quite sad the amount of personal vitriol about someone who really obviously cares about what he does.”

    I believe that Lavrenty Beria also obviously cared about what he did too (not that I’m comparing small-fry Murphy to a monster like Beria, it’s the principle of “obviously caring” that I’m trying to illuminate). All manner of evil people really obviously care what they do/did. Doesn’t stop any of them being wrong or dangerous though.

  30. abacab

    but are you wrong and dangerous?

    Murphy is not the anti-christ, but if you read this drivel of a blog, you’d think so. I guess Worstall is gearing up for election year, even though he’s enjoying European everything. Little Britain.

    At least he’s not doing the Teh Gayers thing any more. The twat.

  31. @Arnald,

    I could be wrong, I’m open to that, but as I am in no position of influence I’m highly likely to be dangerous by forcing any of my potentially wrong ideas on the population.

  32. Arnald

    1. You are yourself highly abusive.

    2. You also read this blog.

    3. We’d all have more time for Murphy if he allowed comments and occasionally accepted his own errors.

    4. Fuck off.

  33. @ Van Patten
    I recall, although I failed to write down the reference, Murphy saying that “we must reclaim the party from the Blairites”.
    Which party? Not the Greens; so either Labour or IngSoc.
    I had some respect for most members of Old Labour although I disagreed with them on most of their policies, but …

  34. OGF:

    “I only visit this site to drool over the neoliberal rantings. Thank you.”

    Arnold, it’s all right, we understand 😉

  35. Arnald

    I agree he and Jolyon seem to have a degree of commonality. As abacab points out, what it exposed was that when he cannot control contributions, he reacts as you would expect of someone aged about twelve, with open vitriol, ad hominems and attacks on the contributor, rather than on the contribution. I note he has said he will not post again unless Jolyon basically bars anyone from this blog from posting comments.

    In terms of the vitriol, it mostly comes from the man himself, both in his open threat to democracy (see the latest Worstall post), contempt for Freedom of speech and insistence that he and he alone knows more then 300-400 years of combined economic thought.

    I’m not disputing the right to have different opinions – he is. He then also prevents people having right of reply and gets extremely irate when people who have a greater knowledge of taxation and economics (Which is almost every regular contributor on this blog) point out his myriad errors. Fortunately his remit doesn’t extend to here, and his penchant for gaffes seems to have stymied his hopes of political advancement. With the expected Labour wipeout in Scotland, it is possible (and indeed to be hoped) he can be consigned to the dustbin of history where his wholly misguided, proto-Stalinist beliefs belong. I live in hope.

  36. @ Arnald
    The amount of personal vitriol directed at me when I politely pointed out a typo, which Murphy corrected three or four insults later when he eventually bothered to look at the error I had mentioned in my first comment …

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